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Home Depot, Zivelo share insights at NRF on building the 'store of the future'

Healey Cypher, CEO of Zivelo, and Albert Vita, director of in-store experience and visual merchandising at The Home Depot, co-presented their ideas on defining the "store of the future" to a standing-room-only crowd at the Javits Center in New York City.

Healey Cypher of Zivelo and Albert Vita of The Home Depot shared their insights at NRF.

January 17, 2019 by Elliot Maras — Editor, Kiosk Marketplace & Vending Times

What exactly will the store of the future look like? The question was on the minds of tens of thousands of attendees at the NRF Big Show in New York City this week.

According to leaders from The Home Depot, one of the nation's most technologically progressive retailers, and Zivelo, an interactive kiosk manufacturer, the store of the future will define itself through a process of carefully curated questions and experiments.

Healey Cypher, CEO of Zivelo, and Albert Vita, director of in-store experience and visual merchandising at The Home Depot, co-presented their ideas on defining the store of the future to a standing-room-only crowd at the Javits Center Sunday.

The positivity and confidence that both leaders exuded was borne of several years addressing the challenge of integrating digital and physical retail. Cypher recalled that he first sought to bring online thinking to physical retail in his earlier role as head of retail innovation at eBay.

Lessons from McDonald's

Cypher's confidence in addressing the store of the future challenge was likely boosted by the success McDonald's has experienced with its self-order kiosks, which Zivelo provides in the U.S. Cypher said the McDonald's kiosks have delivered 20–30 percent sales lifts on average.

Cypher added that customers today want more from physical stores, which is where most retail commerce still occurs.

"We know that customers expect a lot of us in the physical store," Cypher said. "Customers want more. Now it's about experiments. It's about speed."

One of the most important changes in retail, Cypher said, is that for the first time in a long time, major retailers — like digital retailers — are investing in the physical space.

Technology and customer service

Vita's exuberance about the store of the future is based on his dual focus on technological experimentation and a genuine commitment to customer service. A Home Depot pilot store has 90 tests underway and includes a design center, he said. The company, the world's largest home improvement store with more than 400,000 associates, recognizes that it is a privilege to serve customers' home needs since the home is where their lives happen, he said.

To visualize the store of the future, Vita said, it is necessary to recognize that retail is about human connection and value delivery. He sees his company's pilot store as a living lab rather than a singular project. "This needs to be a sustained process that lives on," he said.

If that statement sounds theoretical, Vita added a dose of practicality in pointing out that experimentation is a mathematical process. The more experiments you do, the more successes you will have. He called this the "mathematics of innovation."

Whatever the test is about — be it self-checkout or in-store digital — it's important to measure the results, he said. Additionally, he asked, what change does the experiment bring to inventory planning, replenishment, supply chain, marketing, IT and human resources?

"All these pieces need to be part of the conversation," Vita said.

Cypher agreed on the importance of measuring results. He said a key question is how much effort to invest in measurement. For example, he said, it is important to know the numerical relationship between sales and how long it takes for a retail customer to be served.

How to begin

How do you begin the process? Vita said that the first step is to ask questions — the right questions.

The second step is to create the right mindset, he said. If you have a "scarcity mindset" — one that focuses on the competition — you will get scarcity. If you have an "abundance mindset," you will find opportunity.

The third step is to adopt the right values. The quality of a future store will never exceed how grounded it is in the company's values, Vita said.

"What value would you like to bring to life in your stores?" he asked.

Vita cited "super-values" of empathy, humility and love. "At the root of all of these decisions is a genuine affection for our associates and our customers in our stores," he said.

Cypher suggested focusing on a handful of customer journeys that your company can master.

Pitfalls to avoid

In conclusion, Cypher pointed out seven traps to avoid in introducing new concepts to retail:

The friction trap — trying to reduce friction, but ending up creating more of it.
The isolation trap — trying to come up with new ideas in a vacuum.
The success trap — predetermining what success will look like while underutilizing instrumentation.
The finish line trap — there is no finish line.
The associate trap — introducing a new idea that associates don't care about because it doesn't make their lives better.
The infrastructure trap — introducing a new idea when the infrastructure needed to support it doesn't exist.
The human behavior trap — trying to create a new use case. "You can't create new use cases," he said.

The goal of a successful innovator is not to create an innovation, Vita said, but to solve a customer-centric problem.